X, a fraudster, asked to buy P’s car face-to-face, and asked to pay by cheque. Initially P insisted on cash but when P gave them his (fake) initials and his (fake) address and told them he was a wealthy businessman, which P checked with the phone book, they allowed him to pay by a cheque which bounced. CA held that although usually a contract was formed where P had met D face-to-face since P was assumed to intend to deal with the person before them, the fact that P tried to check whether D was really who he said he was by looking at the phone book overturned this assumption.
Sellers LJ: The presumption created by X’s presence is not conclusive- it merely suggests that P had a better opportunity of discovering X’s true identity and therefore is to be taken as more likely to be dealing with the person before them. Clearly if X were in disguise, this presumption could not stand, so why should words that are as misleading as any disguise be given a different effect? He says that the presumption created in Phillips v Brooks was a bad one, but since it has stood for so long he cannot dispute its correctness. Instead he distinguishes it on the grounds that there it was not really material to the shop-owner who the customer was since he subjectively intended to deal with the customer before him, which is generally the case and therefore to be presumed. However in this case P was making an exception for X in allowing him to pay by cheque and therefore his identity and standing were crucial and hence material enough to overturn his presumption. In order to find whether a contract has been entered into we should ask "How ought the promisee to have interpreted the promise". He also distinguished this case from Phillips on the grounds that in that case the false identity was given to P after the contract was concluded and was therefore irrelevant.
He would have been better off just saying that the Phillips presumption is wrong and should be overturned.
Pearce LJ: Phillips was decided on its own particular facts regarding whether P intended to sell to whoever was before him or only to the person whose false name was on the cheque i.e. no presumption applies
Devlin LJ (dissenting): There was nothing to rebut the ordinary presumption that the first plaintiff was addressing her acceptance to the person to whom she was speaking. Therefore, there was offer and acceptance in form. In the present case, the rogue's identity was immaterial. His credit-worthiness was material, for the plaintiffs were really concerned with his credit-worthiness, not with his identity, but credit-worthiness in relation to a contract was not a basic fact, and a mistake about it did not vitiate a contract. He also says that it is a non-question to ask whether P wanted to contract with X or the party who she believed X to be, since she believed them to be one and the same.
WRONG: Identity was material as evidence for the credit-worthiness. Also it is possible to ask would she still have gone ahead, had she in fact known that X was not who he clamed to be.